Now, billionaires Charles and David Koch, who are among the institute’s four equal shareholders, are trying to gain full control and remove [Cato President Ed] Crane, for reasons they have not spelled out publicly.

Crane says their goal is to turn it into “yet another political arm of their vast empire.”If so, they will be turning gold into straw. Cato’s value is precisely that it’s not a political entity but an idea factory, where the goal is sound research and intelligent advocacy on important issues. It’s hard for me to imagine that getting rid of Crane, who has steadfastly upheld its mission, will be for the good.

Emphasis added. Cato is a first-rate idea factory, an institution which owes its strength in large part to its independence from the political “wars” of the nation’s capital. Its experts offer sound and principled analysis of public policy, showing how statist solutions tend not to solve social and economic problems, but exaggerate them.

There are a number of free-market advocacy organizations out there, a good number which have grown with the emergence of the Tea Party. Let Cato be Cato. And let other organizations to do the advocacy work that this successful think tank shuns.

13 Comments

Have we looked at Charles Koch’s side of the story? Not that Crane is wrong, but he does sound like a man protecting his job.

At the heart of the dispute is the fate of the shares owned by Niskanen, who died in October at age 78 of complications from a stroke. The Koch brothers believe that they have the option to buy Niskanen’s shares, while Cato officials believe that the shares belong to Niskanen’s widow…

Sounds to me like a contract dispute, one for the courts. If the Kochs should/do in fact have an option to buy Niskanen’s shares, then, that’s that. Or if not then not; but either way, Crane shouldn’t be out there echoing the Left by levelling accusations about the Koch’s dark agenda…. unless there is reeeaaaaaally something to it, something more than a legitimate contract dispute.

I should hope that as a libertarian, Crane has enough respect for contracts to know that sometimes, they must be litigated.

Ooh, and I just spotted the bias in WaPo’s phrasing, “Cato officials believe that the shares belong to Niskanen’s widow…” Sorry Wapo, but as founder-owners and as board members, the Kochs *are* “Cato officials”. So no, “Cato officials” don’t believe the shares belong to Niskanen’s widow, at least not unanimously.

Dan that’s my point: it doesn’t really sound like you’ve looked at both sides of the story yet. Maybe you have, I don’t know, but it’s unclear. And maybe after doing that, would be the time to come down on Crane’s side. (Like Wapo, you bias the issue somewhat by referring to it as “Cato’s side”; again, as founder-owners and board members, the Kochs are equally “Cato’s side”.)

Finally, FTR, I agree that Cato does first-rate work on domestic policy issues… however, I think they have been not only wrong on some of the foreign policy issues, but unfair in how they have sometimes characterized their opponents on those issues.

Just because the Kochs are legally entitled to take an action (as they may be) does not mean they should. This is like a nasty custody battle in which strict enforcement of a pre-nup may not be in the child’s interest. The interests of Cato, as a non-profit mission-oriented institution, are independent from the interests of specific shareholders.

JHA: That a fair point. However, it cuts both ways. I mean, until we get more information, how do we know that it isn’t Crane who is acting against the good of Cato here?

It’s largely accepted now that when Paul McCartney (a Beatle) sued The Beatles as a legal entity in 1971, he did the right thing for all the Beatles (as well as himself of course) because he got them all out from under a very bad manager. But at the time, some people hated on him, saying in effect, “Paul is selfish – I side with The Beatles”.

So, the Crane group opposes the involvement of good men like Andrew Napolitano and John Hinderaker (of Powerline), designating them “Koch operatives”? Sorry, my skepticism remains.

Again I think it comes down (or ought to) to the shareholder agreement. The Kochs co-founded Cato. Either they have the right to take over Niskanen’s share, or they don’t. I have no idea which it is. I hope the court makes the right choice – that is, following the rule of law. I’d only want the Kochs to win, if they deserve it. If they do, the Crane supporters will doubtless found a “new Cato” – and take lots of donors with them. I should think that libertarians, of all people, would take such competitive re-configurings for granted.